Published work
How small business owners can manage benefit costs while protecting employees
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Written by: Adam D. Peros CLU®, CEBS®, CHS™
November 27, 2024.
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"There are risks and costs to action, but they are far less than the long range risks of comfortable inaction." John F. Kennedy.
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It is widely known that small businesses are significant contributors to Canada’s economy. In fact small and medium-sized businesses contribute over half of GDP, with roughly 99% employing 1-99 workers. Of these small businesses, 72% offer workplace benefits. A comprehensive benefit plan allows businesses to compete for talent promoting company growth. The obstacle however is balancing costs while ensuring employee satisfaction.
Less known are the options forreducing benefits costs while maintaining support for staff. Workplace benefit premiums are a tax-deductible business expense for employers. Selecting low maximums, co-insurance, splitting premium and limiting benefits are common options to reduce this premium. There are however other alternatives that further reduce costs. Considering current economic conditions and inflation, specifically within healthcare, it’s prudent to explore these possibilities. Furthermore, we’ll analyze common plan changes that provide the greatest savings beginning with the most drastic.
In 2023 CLHIA (Canadian Life and Health Insurance Association) paid a record $128 billion in claims, a 13% increase from the record set in 2022 ($114 billion), which was also an increase from another record set in 2021 ($113 billion) according to CLHIA’s annual reports. This is a 68% increase from a decade ago.
Canadians are claiming now more than ever, especially in mental health. Consequently, it is important for business owners to focus on managing the well-being of staff while mitigating costs. This was evident during the global pandemic when insurance providers saw many businesses continue to offer pooled benefits (life, accidental death and dismemberment, dependant Life, short and long term disability) while changing the catastrophic portion of their health plan. Health and dental benefits typically covered under traditional plans were self-insured through a Health Care Spending Account. These benefits are excluded under provincial health plans that must be CRA approved eligible expenses. The catastrophic portion of the extended health plan are claims that occur less frequently but significantly expensive such as; drugs, out of country/travel, accidental dental, hospital and private duty nursing.
Self-insuring requires offering a flat dollar amount in the form of a HCSA for certain health claims such as paramedical practitioners (massage therapy, chiropractor, physiotherapy etc) and potentially medical services and supplies (orthotic inserts, orthopedic shoes, crutches etc.) Dental can also be claimed under a HCSA if not insured with the benefit plan. Catastrophic coverage is viewed as “true insurance” whereas other health benefits like getting a massage are elective. Dental coverage, conversely, is preventative and used to avoid future health issues.
By only insuring catastrophic claims and offering a HCSA for health and dental, the monthly premium should be less than fully insuring the entire plan considering the insurance provider’s risk of claims normally paid have decreased. This has now been passed to the employer who has further mitigated this risk by limiting how much each employee can spend on specific benefits, offering a flat dollar amount used towards health and dental claims or not offering certain benefits.
Standalone HSA’s are offered in the form of a PHSP (private health services plan). Both of these approaches are typically the least expensive benefit plans and often are used by business owners working independently or offering basic coverage for the few employees they have.
Larger businesses typically offer more traditional benefit plans that insure pooled benefits and health and dental. In these cases there are more options available to minimize risk and cost for businesses. The plan design changes that generally result in significant savings are establishing limits on drug coverage, reducing co-insurance and lowering dental maximums. Cost containment options typically provide to businesses by carriers are the following;
General
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Family plans starting at two employees (can be for spouses, common law partners with family coverage with one employee waiving health and dental) as long as they work a minimum of 20 hours a week and choose a minimum of number of benefits depending on the carrier
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Splitting premium with employees (although there are potential cons to this)
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Pooled plans that offer renewal caps (subject to claims experience)
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Co-insurance vs 100% coverage, flat life benefits instead of multiple or large maximums, couples rates vs family rates
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Negotiating rate guarantees and renewal caps
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Negotiating weighting at the renewal
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Deductibles
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Tiered benefit plans
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Using preferred providers
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Longer waiting periods
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Calendar vs policy year
Extended Healthcare
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Drug stop loss below 10K which is the industry standard
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Dispensing fee caps, using less expensive pharmacies, receiving a larger drug supply (90 days)
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Generic drugs instead of brand, changing drug formularies
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Restricting therapeutic drugs
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Restricting paramedical practitioners and combining maximums
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Using cost plus for certain benefits like vision care
Dental
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Reducing maximums, recalls, fluoride, scaling, bonding,
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Using older fee guides
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Basic dental only
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Limit fluoride treatment
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Excluding the hygiene instruction benefit
It’s important to speak with your Benefits Consultant prior to making changes to understand the implications for your business and employees.
Adam D. Peros CLU®, CEBS®, CHS™,Principal, Mercato Consulting
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LinkedIn: https://www.linkedin.com/in/adamdperos/?originalSubdomain=ca
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Website: https://www.mercatoconsultancy.com/
Resources
http://clhia.uberflip.com/i/1526931-canadian-life-and-health-insurance-facts-2024-edition/0?
https://www.bluecross.ca/benefitsstudy/
https://publications.gc.ca/collections/collection_2024/isde-ised/Iu186-1-2023-eng.pdf
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(From the August 2024 Edition of COMMENT newsletter)
By Adam Peros
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“Your employee’s are your company’s real competitive advantage. They’re the ones making the magic happen so long as their needs are being met”. Richard Branson
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For many Canadian small business owners who are considering employee benefits, meeting their employees’ health needs is vital to growing their company by attracting and retaining top talent.​ If you are a small business owner and have been thinking about offering employee benefits you most likely have looked into the cost benefit analysis; what will it cost me and is it worth it?
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According to a 2023 Blue Cross Business Benefits Study, 80% of employees consider a business’s benefit plan prior to making their employment decision and another 73% would remain with their current employer over better pay at another company. Furthermore, 84% of Employees who work at a firm with an existing health benefits plan would not change employers to one that did not offer health benefits.
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In fact, 72% of small Canadian businesses (up to 100 lives) already offer benefits to their employees where as 94% of mid-sized business (100-500 lives) offer benefits.
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“Despite the financial challenges Canadians have faced this year, health remains a top priority,” said Tim Bishop, Managing Director, and Blue Cross of Canada. “These findings were unexpected during times of high inflation and reinforce the inherent value Canadians place on health benefits.”
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Just under 50% of employees in Canada would rather have a health benefits plan over a $40,000 raise. Another finding was that not having benefits can increases business’s risk and create substantial difficulties. The same Blue Cross survey found that 76% of employees without health benefits would change employers for better health benefits. The absence of benefits increases a small businesses risk of lower employee productivity (21%) and falling behind the competition (19%).
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“What we’re seeing now is that employers can’t afford not to have a benefits program,” said Alaina Mackenzie, regional vice-president of business development at Medavie Blue Cross in a Benefits Canada Article from 2021. “The value proposition that employers bring to the table positions them as the employer of choice for prospective employees and their benefits programs are part and parcel of that employee value proposition.”
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91% of employee’s appreciated their benefits plan’s effect on their overall health and welfare, 89% of employees showed similar appreciation regarding their benefits contribution to their financial safety and 37% of employees stated peace of mind as the main reason they value their benefits plan.
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Conserving the output employees contribute to a business’s success can be difficult when you consider the amount of change Canada’s workforce has seen since the pandemic. According to respondents in an ADP Canada survey conducted by Maru Public Opinion, employees left their occupations for the following main reasons; better income (32%), career change (29%) and a taking a more senior position (17%).
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Conversely, business owners selected the following as the top benefits of working for a small business; 53% said better work-life balance followed by 48% with more flexible schedules, 40% chose a closer relationship with the owner and/or executives, 36% of owners chose a stronger team bond as their reason and finally greater attention from management paid to their employees well-being and mental health was selected by 35% of business owner respondents.
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In a separate Benefits Canada piece from the same year, Simon Bourgeois, Humi’s chief executive officer and co-founder said, “Offering benefits is key these days as “the demand for talent [has] skyrocketed,”. “The dial has been turned up with regards to recruiting process speed and hiring packages. It’s not just about salaries anymore. Canadians are recognizing the value of work-life engagement, a better and more robust compensation package and the value of feeling like they belong.”
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Business owners will undoubtedly face struggles in their nascent years as can be seen in the most recent Stats Canada Entrepreneurship indicators of Canadian enterprises report. 83% of businesses that closed in 2020 had 1-4 employees specifically in the professional, scientific and technical services sector which accounted for 16%. Conversely, small businesses also accounted for 100,780 births (85.4%) which is a motivating highlight concerning job growth. 17.3% of these births were also in the professional, scientific and technological services sector
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With that being noted, it’s important to not only be cognizant of the connection that offering benefits can have in attracting the most qualified employees to help getting small businesses off the ground but also in offering the most suitable and relevant benefits in attracting those workers.
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Different industries value different benefits as can be seen in a September 2023 study by one of the industry leading Third Party Administrators (TPA’s), Benefits By Design. They interviewed 4,600 of their group benefits clients. What they found was the following;
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- Employees in the finance and insurance industry received the greatest coverage concerning Long term disability (LTD 61%) Employee assistance plans (EAP 19%) and Health care spending accounts (HCSA 25%).
- Companies in the construction industry lead the way in offering dependent life coverage with 62% compared to 49% - 58% in a majority of the other industries.
-Extended Health (98%) and Dental Care (97%) were mostly offered by groups in the Accommodation and food services however other benefits being offered at lower percentages dropped them lower in the overall ranking
- Short Term Disability coverage was offered most frequently in the Educational services industry at 12%.
- 49% of groups offered Critical Illness in the Educational services compared to 25% - 35% for the majority of other groups
- Diagnostic Specialist Access (DSAI) which most industries only offer at 0-2% came in at 6% in Manufacturing.
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The industries with the overall best employee benefits ranked out of 5 stars in descending order were; Finance and insurance, Educational services, Construction, Professional, scientific and technical services/Information technology (IT), Retail trade, Health care and social assistance, Manufacturing and finally Accommodation and food services
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It’s no surprise these same industries also account for a significant percentage of HGF (high growth firms) which are companies that substantially increase in employment and revenue in a relatively short period of time. According to the OECD (Organization for Economic Co-operation and Development) HGF are firms with a minimum of 10 employees that have seen average annual growth of greater than 20% in employees or revenue over a consecutive three year period. The most recent study conducted in 2017 by stats Canada shows us that HGF accounted for 41% of net employment changes from between 2009-2012.
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How does all of this data concerning the current status of the Canadian job market and group benefits relate to what we are seeing now?
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Based on the most recent annual stats Canada survey from 2023, there were 1.22 million employer businesses in Canada. 97% of these were small and 1.95 were mid-sized with more than half of the small business made residing in Ontario and Quebec. 21.6% of theses business are in the goods producing sector with the remaining 78.4% in the service producing sector. More than half of Canadian businesses are between 1-4 employees while businesses with 5-9 employees brings that number up to 73% meaning three quarters of Canadian business have between 1-9 employees.
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Other key findings from the reports were as follows
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More than half of Canadian business are in – professional, scientific and technical services, construction/retail trade, health care and social assistance, other services industry.
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17.2 million people were employed with 71.1% in the private sector and 28.9% in the public sector. Of those employed in the private sector 63.8 % were employed by SME compared to 30.3% in the public. Of that 63.8% of the private sector in the SME, 46.8% or 5.7 million worked for small business 1-9 employees with 17% or 2.1 million in mid-sized business.
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SME’s account for over 70% of employment in at least 4 industries; construction, accommodation and food services, real estate and rental and leasing and professional, scientific and technical services
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During the pandemic, there were many small business closures specifically in the service industry. In 2021 recovery began eventually reaching an annual growth rate of 7% in 2022 with the addition of 802,550 new jobs in the private sector. Small business accounted for 329 491 (6.1% growth rate) with mid-size business 146,570 (7.8 % growth rate).
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From 2021-2022, 84% of total net employment change was attributable to business in the service-producing sector specifically accommodation and food services and professional scientific/technical services. These industries accounted for 47% of the change in the service producing sector. The remaining 15% of the total net employment change came from the goods-producing sector specifically construction, manufacturing, and natural resource extraction.
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Over the last 5 years (2016-2020) 100,475 small businesses were established annually with 96,548 closing. Between 2001 and 2020 the number of small business increased every year except for 2013, 2016 and 2020. This net result between an increase or decrease in the number of businesses is described as “creative destruction.”
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2023 saw business insolvencies rise by 41% compared to 2022 which was the largest increase in more than 3 decades. The 3 industries with the largest increases were Accommodation and food services (43.8%), Retail trade (53.2%), Construction (31.2%). Despite this, the closure and opening rate for businesses were equal with both at 4.6%
The most recent analysis on small business in Canada, second quarter of 2024 by Stats Can found that small businesses had less optimism about their future, expected a decrease in profitability, an increase in cost-related obstacles and were unlikely to hire new employees.
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It’s not all doom and gloom. Small businesses were less expected to anticipate labour-related hurdles and while the number of active businesses dropped in 2023 on a monthly basis, the monthly average was greater than in previous years, indicating positive growth.
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Canada’s overall economy and labour market has shown signs of volatility creating turbulence for small businesses. A small business’s infancy can be characterized by meager earnings followed by thin or negative profit margins. Sometimes just withstanding the storm is of most importance pertaining to long term viability. Providing a cost efficient benefit plan that is suitable to your employee’s most important needs, can help you retain your talent to survive another day.
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References
Employees highly value health benefits, study finds - BNN (ampproject.org)
Navigating the management and HR challenges of a post-pandemic world - The Globe and Mail
Small businesses increasing wages, benefits to attract talent: survey | Benefits Canada.com
Industries with the Best Employee Benefits Plans - Benefits by Design (bbd.ca)
2023-Blue-Cross-Small-Business-Benefits-Study-Report.pdf (bluecross.ca)
https://www150.statcan.gc.ca/n1/daily-quotidien/231106/dq231106b-eng.htm
Key Small Business Statistics 2023 (canada.ca)
Analysis on small businesses in Canada, second quarter of 2024 (statcan.gc.ca)
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Helping small businesses attract and retain top talent: How Canadian advisors can establish a path to success by generating new opportunities in the health benefits field
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(Written June 14 2024 in Canadian SME)
By Adam Peros
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“I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” Steve Jobs
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Starting a new career as a self-employed individual in today’s climate can be a daunting task. Whether you were laid off during the pandemic or you want to own your own firm, working on commission can be frightening but it doesn’t have to be.
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Hopefully you’ve made the decision after crafting a well thought out plan but more importantly after deciding WHY you are taking the leap. Is it flexibility? An opportunity to generate more income? Maybe you enjoy the idea of being your own boss. All of these are relevant however I think the importance lies in finding the right balance of the following; What are your needs? What are you good at? What can you be paid for? and what do you love? This concept is known as “Ikigai” and its origins are thought to be native to Okinawa Japan. Coincidentally enough the Okinawan language (uchinaaguchi) does not have a word for retirement. This approach to life could also be one of many reasons why Okinawan’s have historically per capita the most centenarians in the world. However recently there has been an increase in influence from the Western world (fast food, less exercise, stress from modern living). This has created a loss of a feeling of Ikigai in the younger generations contributing to the drop in Okinawa’s life expectancy.
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While starting on your path typical questions that arise are where will I get clients? How will I approach decision makers? What if things don’t work out? Am I ready for this? This is completely normal.
Having worked more than 15 years in the financial services industry as both an advisor for business owners and decision makers and as an account executive working with thousands of advisors I have come across recurring patterns in generating new business. Below is a further explanation of these themes in greater detail followed by specific success stories.
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Purpose
Why am I doing this? Most advisors have a specific purpose which is often the catalyst that drives their effort. Just as important is their ability to set themselves apart and stand out. A former colleague who now runs his own practise with another former co-worker once asked me this question while I was making cold calls in my nascent career “why should a prospect listen to you and not the other advisors who called them today?” It had a profound effect on the approach I took with how I conducted business and helped me focus on finding a way to stand out.
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The 4 common differentiators I found with most advisors are the following; Work experience/knowledge, Network, Industry Designations, Personality/Approach to work. Each advisor combines their own unique mix. I have met advisors with plenty of credentials but lack character and/or business acumen. Others have plenty of work experience with great work ethic but lack the network to prospect. Some hold prestigious designations but don’t have the industry knowledge to match. What I have found was that what you lack in one area is important to make up in another. Having all 4 is the ideal recipe for success.
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There is a famous and often over-used saying, “Hard work beats talent when talent isn’t working hard.” As cliché as it is, it’s extremely relevant in the group benefit’s landscape which can often be described as a number’s game.
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Prospecting
In Ontario alone there are 444, 702 small business (1-99 employees). LinkedIn and company websites are a great place to find the potential decision makers. Working the path of least resistance like your social network is often a starting point for most fledgling advisors. Many advisors work with the following; family, friends, former colleagues, Facebook, Instagram, recreational leagues, services or professionals you use like your dentist or physiotherapist.
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Key Small Business Statistics 2023 (canada.ca)
You may have work experience or education in another industry which would make it easier to break the ice and strike up a conversation. I’ve worked with advisors who focused on construction or fitness because of their prior work experience for example. Some advisors focus on a specific geographic area, size of company, or market (golf courses in Halton region or start-up tech companies under 100 lives).
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Each region and municipality in Ontario often has an excel spreadsheet, online database or pdf that can be downloaded or purchased for free.
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Other common places to find leads or business are; referrals from existing clients or people you know, a referral plan with business lawyers, accountants, bankers, lead generation companies, classified ads, leaving business cards and/or marketing documents in high traffic areas, attending events specific to your approach (new professionals like doctors, lawyers, engineers, Human Resources, start-up companies looking for investments, government funding for businesses) targeting franchises and asking for leads from your account executives at difference insurance companies.
Finally, there is the option of purchasing an advisors block or working in tandem with an advisor who specializes in other services (Property and Casualty or Life Insurance).
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Approach
A well thought out value proposition unique to you is extremely important. Just as important and something that is often overlooked is not just your method but your tone of delivery. Will you be cold calling, emailing, messaging via social media or walking in person (yes, some people still do this). Will you focus on a plan service agreement such as better turnaround times, caps at renewal, access to enhanced services or products like a more robust EAP (Employee Assistance Plan), involve a TPA (Third Party Administrator) or the often overused reduced pricing. How forward will you be in pushing for a meeting? Will you at a minimum ask for the carrier and renewal date and ask to follow up at a better time?
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Success Stories
Below are a few examples of actual sales advisors made based on some of the topics mentioned above.
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Perseverance
After following up with the office manager of a large multinational company on numerous occasions checking in on the benefits plan, the advisor was eventually transferred to the CFO and eventual decision maker. After the advisor earnestly opened with, “You probably get these calls all the time,” the CFO responded with, “Actually I don’t, thank you very much for calling.” The advisors persistency eventually lead to winning a 200 life group.
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Repairing Trust
The decision maker at this mid-sized company was disillusioned by their relationship with past advisor after a large increase in rates followed the initial period of savings. The advisor decided to earn back their trust in increments by setting small goals such as calling back at a certain time and date, sending a newsletter with industry changes, following up with an email explaining certain products and services in greater detail. Over the course of a few years the advisor won the group back.
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Perfect Storm & Timing
After running into an old friend from school and making small talk the advisor set up an initial meeting with the friend’s parents and owners of this local construction company. They eventually won the group by recommending plan design changes resulting in significant savings. Most importantly, the fact that there was no relationship with the advisor, poor service and rising costs helped them win this group.
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Social network outside of work
Another advisor won a smaller group simply by having the conversation at a men’s league event with a family friend whom they did not know managed their own company. Luckily for them, their friend was unaware that they didn’t even have an advisor.
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Franchise opportunity & and word of mouth
Having done such a good job with one business location’s benefits plan in this automotive company, this advisor eventually won numerous franchises which lead to a much more lucrative deal. Success by association is what worked in this instance after one business owner decided to contact the other franchise owners which helped them decide to move their business over to the new advisor and carrier.
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Transparency
A close friend of mine and fellow advisor who specializes on the individual side was successful in winning many of client’s group business simply by disclosing his commission while the incumbent advisors were not.
Maximizing opportunity
Finally, after winning the benefits plan contract this advisor with the permission of the business owner would hold a session for employees where they would discuss individual insurance, RRSP’s, TFSA’s, Mortgages and other individual products.
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There are plenty of different ways to generate new business. Each story is uniquely different given the approach, relationship and timing of the situation. Whether you are starting from scratch marketing yourself, purchasing a block, working with another specialist or have access to a prestigious social network, a few things remain the same. Purpose, niche, approach and effort.
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Moving on from the Pandemic: How covid affected the Canadian workforce and what this means for the future. - Advocis
(From the March 2024 Edition of eFORUM)
By Adam Peros
“You can’t really know where you are going until you know where you have been” – Maya Angelou
The post pandemic response to changing needs by employers has been arduous given the unpredictable effects of covid on businesses in Canada.
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Employers are tasked with managing existing needs while being better prepared for potential future issues. Finding the right balance is key, but more importantly how is that balance determined? The response so far has been a middle ground attainable for employers and employees while meeting the demands of consumers.
Before looking at how this shapes the future, and any silver lining, we will analyze the past and present.
The statements below are based off of information gathered from the following reports and surveys.
Stats Canada, Benefits Canada Survey report 2021,2022,2023, Benefits Canada Future of Work Survey 2023, Manulife Wellness Report 2022, The Toronto Star, The Canadian Centre of Substance Use and Addiction.
Effects on Canadians
-As of today according to COVID-19 epidemiology update: Current situation — Canada.ca there were 4,929,750 cases of covid, 58,348 deaths and 2,531 hospitalized with almost half the cases and deaths in Ontario and Quebec.
-This has had a great effect on the mental health and well-being of Canadians. The most common impacts for both groups were feelings of loneliness or isolation, physical health problems, and challenges in personal relationships.
-Family financial well-being (income and wealth) was also an issue, which led to changes in household spending habits, and was aided by pandemic relief programs. It’s important to note that Canada has the worst Net to debt ratio amongst G7 countries.
-All of these reasons have contributed to an increase in various negative coping mechanisms such as substance abuse.
-In extreme cases, there were breakdowns in marriage. Although divorces were down during the pandemic there has been an uptick since we have returned to normalcy due to backlog.
In essence, social isolation combined with a multitude of fear and the unknown has led to a deterioration in Canadians well-being and overall health.
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Effects on Businesses
There were just as many challenges for businesses (Closing operation, partial closes, loss of revenue, temporary and permanent layoffs). This was clearly more evident for small businesses which were more likely to do the following;
– report a drop in revenues by 20% or more from Q1-2020 to Q1-2019.
– laid off more than 80% of their workforce if they laid off at least 1 employee
– request credit from financial institutions to cover operating costs due to COVID-19
– have their rent deferred
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It’s not all doom and gloom. Many employers and employees have undoubtedly been attempting to respond in a positive and healthy manner.
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Attraction and retention is still a key focus for employers as employees re-examine their desired working conditions. As a result employers have responded with the improvements in career development opportunities, better group benefits plans and increased pay.
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Implementing a work culture that promotes employee welfare and discussion has also increased. As businesses change so do employees opinions on their needs and wants specifically concerning their overall health, flexibility and finances. Employers in turn are looking for ways to help mitigate overworking employees and allowing them time to refresh themselves.
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The future workplace is pointing in a direction with a more balanced approach. While some business owners have had employees return to work onsite entirely many have changed their approach. Having employees work from home, within reason, would allow for more comfort and freedom to better maintain a healthy working environment that would in theory help with productivity. Virtual work arrangements have also aided with keeping employees connected and engaged.
Effects on Benefits
Historically business owners have had the following concerns regarding their benefits plans; rising drug and dental costs, paramedical services usage, disability claims, expensive new drugs being introduced, competitiveness and fraud/benefits abuse, inflation
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The pandemic introduced new issues; a significant increase in dental claims due to dentist’s being closed, similar increases in claims with paramedical providers, benefits removed, constant billing changes, partial premium and benefits removed entirely.
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Fortunately we can put the past behind as we continue to progress into a post pandemic world. With that being said, employers and employees have a revitalized focus with their plans. The 2023 Benefits Canada Survey found the following.
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– A mental health condition is the no.1 current diagnosis amongst plan members, it can lead to a secondary diagnosis,
– Personal health and job satisfaction have a clear effect on the benefits plan highlighting the importance of an employer’s involvement in monitoring employee’s health and productivity
– A strong majority of employees appreciate their benefit plan more now than before the pandemic with those who understand what is in the plan to be most appreciative. However levels of understanding have declined since 2018 suggesting better communication could mitigate this.
– For new benefit plan members, support in navigating the health care system was their no.1 goal highlighting the importance of understanding more about their benefit plan
– Half of plan members agreed the coverage level of at least one benefit limited their ability to receive treatment increasing to 75% of plan members when that individual had a major injury or has relied significantly on mental health and paramedical therapy
– 3 out of 4 plan plan members were content with their workplace environment and company’s approach to mental health and wellness. The same proportion of plan sponsors plan to invest in at least one wellness area in the next 3 years with mental health being at the forefront.
Other important findings
– Members were more likely to take cash vs benefits when that dollar amount rose to $15,000
– There are more virtual care services offered with employees responding positively
– Inflation was the top concern for plan sponsors looking to add value to their benefit plan
– 60% of plan sponsors reported an increase in their health benefits plan over the past 3 years
– 88% of plan sponsors agreed more needs to be done to curb specialty drug costs
– Plan sponsors are benchmarking their benefits plan now more than ever
– 28% of plan sponsors added or improved their benefits plan since last year
– 39% of plan sponsors offer a flex plan up over the last 2 years.
– Over a third of plans include a health care spending account
– Employee Assistance Plans are still generally underutilized
– The highest single average out of pocket expense was for mental health therapy ($1,739).
– Most plan members want to receive health information from their company’s provider such as recommendations based on personal claims data.
– More than half of employers and employees said non-financials (paid leave, vacation/sabbatical) should be a priority in maintaining work-life balance.
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The good news is that people are overall healthier now than in 2020. They are getting better sleep with less mental health issues, there is a boost in employee morale and companies are focusing more on finding ways to help their employees with their overall health.
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There are still more days lost due to absence and presenteeism (this could possibly be due to a shift in being more proactive than reactive resulting in employees taking time off if they feel the need before it becomes a problem). Financial stress is up due to inflation and the overall state of the economy while a feeling of loneliness has maintained steady.
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Where do we go from here
Moving forward there is an indication that businesses will have an increased focus on being better prepared and more proactive while allocating necessary resources to help employees manage their overall wellbeing and health. Employees have shown a renewed purpose in making better lifestyle choices while also being more selective in their workplace environment.​
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More than ever have we seen how the body, mind and work connection coupled with financial and family wellbeing can effect an individual’s health for better or worse. We live in a more connected and competitive world with evolving technologies, products, services and overall constant change. This has put added pressure on both employers and employees to keep up and while also being productive.
The past few years have certainly not been easy for most Canadians to say the least. If employers can balance being competitive while looking after their employees we should be better prepared to handle potential future global crises. In the end, this will be determined by each companies philosophy and both the collective and individual choices we make.
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Reports/Surveys
The Daily — Survey on COVID-19 and Mental Health, February to May 2021 (statcan.gc.ca)
Canadians’ Well-being in Year One of the COVID-19 Pandemic (statcan.gc.ca)
Canada’s ballooning household debt — the worst of all G7 countries (thestar.com)
Divorce in Canada: 2020 saw lowest rate on record | CTV News
Divorces more acrimonious during pandemic: lawyers | CTV News
Broken marriages becoming pandemic’s other toll | CBC News
Impact of COVID-19 on Small Businesses in Canada (statcan.gc.ca)
The Wellness Report in 2022 – The Wellness Report | Manulife
The 2021 Benefits Canada Healthcare Survey
2022 Benefits Canada Healthcare Survey
BCHS-Report-2023-0925-ENG.pdf ​​
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